Verizon is going to buy Terremark for US$1.4bn in a move that will help accelerate its ‘Everything-as –a-Service’ cloud strategy.
Verizon said a tender offer will be made between 10 and 17 February for all shares of Terremark’s common stock for 35% per share over Terremark’s closing price as of 27 January.
Verizon said the Terremark name will remain, and the company will operate as a wholly owned subsidiary, retaining Terremark’s current management team led by Manuel D Medina.
Medina said the deal will allow Terremark, which has pushed towards the cloud in recent years, to benefit from Verizon’s innovation in the communications and cloud space.
Verizon is known for its broadband, wireless and converged communications delivered over fiber-optic networks. It currently has a two-year option on 160 acres of land, thought to be for data center use, in Wyoming, US, and is currently fighting local constituents who are against it building a data center in Niagara, New York. It is also one of Terremark’s customers.
The company has not been shy about its cloud goals, It previously said it wanted to build out its global data center footprint to expand its Computing-as-a Service suite, which would require adding 5,500 server cabinets in Paris, Dublin, London, Frankfurt, Belgium, Canberra, Hong Kong and throughout the US.
Terremark offers Infrastructure-as-a-Service as part of its colocation offering. It is especially strong in Latin American markets and has major data centers in other key territories around the world. It made headlines when it launched in 2000, constructing a 7590,000 sq ft data center in it’s home town of Miami.
Last November it reported fiscal sales of US350m to US353m but reported a net loss as shareholders pulled out of stock costing it US$8m for its July to September quarter.
Terremark’s board of directors said it has unanimously approved the Verizon transaction and talks are already underway with three major stock holders for Verizon to purchase their 27.6% of their shares. The tender is expected to be closed by the end of the first quarter of this year.
Terremark’s Medinia said once the deal was done, it would continue to be business usual at Terremark, with hardware, software and other business relationships remaining in tact.
"This transaction, first and foremost, provides Terremark’s stockholders with the opportunity for immediate, maximum value and liquidity for their investment in our common stock," Medina said.
"[It] represents an exciting opportunity to accelerate our strategy and serve our enterprise and government customers with even greater innovation on a global scale with Verizon’s resources and extensive reach."
Verizon President and COO Lowell McAdam said Verizon is eager to push ahead with its cloud computing goals, changing its relationship with customers going forward.
"Cloud computing continues to fundamentally alter the way enterprises procure, deploy and manage IT resources, and this combination helps create a tipping point for everything as a service," McAdam said.
"Our collective vision will foster innovation, enhance business processes and dynamically deliver business intelligence and collaboration services to anyone, anywhere and on any device."